Bentley Motors Inc. is riding a hot streak. Its stylish $150,000 Continental GT coupe has exceeded global sales expectations.
This fall Bentley will launch the four-door version, the Flying Spur. Global sales and production are at record levels. But Andrew Stuart, Bentley's North American CEO, expects competition to come to the $150,000 to $200,000 segment of the U.S. market. Stuart, 38, spoke recently with Staff Reporter Richard Truett.
Things are looking good for Bentley this year. Sales are good, and you are in a price range occupied by no one else. What challenges are you facing?
One of the biggest challenges is that we are in a brand new segment. We originally had a debate around the Continental GT about whether we'd be able to sell 1,400 cars in the U.S. on an annual basis. Last year we sold 2,300 cars.
It's really exceeded our wildest expectations. But the challenge is as you move more cars into this segment, how big can it be? We don't have the traditional sales-planning tools available to us. You can't look and see what you did last year, how big is the segment, what's my percentage and what's my target. Another challenge is that we don't want to become too high volume and become a pedestrian brand.
Is the United States Bentley's single biggest market, and how many cars will you sell here in 2005?
Yes. We represent, depending on what year, somewhere between 40 and 42 percent of the worldwide volume for Bentley. We will sell about 3,300 cars in 2005. We may slip a few extras in there depending on production.
Has Bentley made much progress in reducing the waiting list for the Continental GT? Is there a waiting list for the Flying Spur?
In general terms, we have about a four- to five-month waiting list on the Continental GT right now. There are some dealers who could probably get you a car without you having to be put on a waiting list. There are other dealers who still have customers lined up waiting. We are starting to build an order bank for the Flying Spur.
Once all the demand is satisfied, what's the proper inventory level for a Bentley dealer here?
Our leadership team was just having a discussion about what that ideal amount could be. I believe that luxury consumers want to get something that's very special. Once something becomes less special and readily available, then it is not quite as hot anymore.
What we want to do is maintain the value of the Continental GT; make sure that from the new-car side, we are not oversupplying the market, so that when the used cars come through the channel, they are still a good value.
That also helps sell new cars because it strengthens residual values. We really don't envision our dealers having a lot full of cars and a customer coming in and picking their color. That's not what we are about.
Right now, we require a dealer to have a demo for test driving. That's the only requirement for inventory.
The $150,000 price range turned out to be a real sweet spot in the U.S. market for the Continental GT. How long before you get some competition?
I don't think for an instant that we will be the only ones playing in that $150,000-$200,000 price range. We happen to be first in it right now, and that's great for us. What we are seeing is that there is a real market demand for it, and I expect other manufacturers to jump in.
Has the Continental overshadowed the Arnage?
We are doing extremely well with Arnage. Our sales this year probably will be about 30 percent higher than our sales for Arnage last year. I think that the Continental series of cars is increasing interest in Bentley as a brand. The volume is going to be somewhere between 250 and 300 units. This is very good for our big car. Bentley has always played in that market of the very high luxury segment, and we will continue to do so. We are very committed to staying in the Arnage range.
Heritage is so important to Bentley owners. Has the German connection, specifically the German-designed engine, hurt Bentley's British heritage?
I have not personally had a lot of fuss from owners and people I have spoken to. Most people who are aware of what has happened to the company recognize that the investment by Volkswagen has been a tremendous thing. We would not have the Continental GT or Flying Spur without Volkswagen Group.
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